10-Q 1 oranco.htm ORANCO, INC. 10Q 2013-09-30 oranco.htm


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
FORM 10-Q


(x ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

(  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _________ to _________
 
Commission File number  000-28181

ORANCO,  INC.
(Exact name of registrant as specified in charter)

Nevada
87-0574491
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

1981 E. Murray Holladay Rd, Suite 100,  Salt Lake City, Utah
84117
(Address of principal executive offices)
(Zip Code)

702-834-9810
Registrant=s telephone number, including area code
                               
(Former name, former address, and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [x ]   No  [  ]

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Se the definitions of “large accelerated filer”, ”accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act

Large Accelerated Filer [  ]
Accelerated Filer [  ]
   
Non-Accelerated filer [  ]
Smaller Reporting Company [ x ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)           Yes [X]      No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer=s classes of common stock, as of the last practicable date

Class
Outstanding as of October  1, 2013
Common  Stock, $0.001
4,269,950
 
 
 
 

 

INDEX

 
 
Page
Number
     
PART I.
   
     
ITEM 1.
Financial Statements (unaudited)
3
     
 
Balance Sheets
4
  
September 30, 2013 and December 31, 2012  
     
  Statements of Operations 5
 
For the three and nine months ended September 30, 2013 and 2012 and the period June 16, 1977 to September 30, 2013
 
 
   
  Statements of Cash Flows 6
 
For the nine months ended September 30, 2013 and 2012 and the period June 16, 1977 to September 30, 2013
 
 
   
 
Notes to Financial Statements
7
     
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10
     
ITEM 3.
Quantitative and Qualtitative Disclosures About Market Risk
11
     
ITEM 4T.
Controls and Procedures
11
     
PART II.
   
     
ITEM 6.
Exhibits
12
     
Signatures
 
13
 
 
2

 

PART I - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS




The accompanying  balance sheets of Oranco, Inc.  (a development stage company) at September 30, 2013 and December 31, 2012, and the related  statement of operations for the three and nine months  and the  statement of cash flows for the nine months, ended September 30, 2013 and 2012 and the period June 16, 1977 to September 30, 2013 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating  results for the three and nine months ended September 30, 2013, are not necessarily indicative of the results that can be expected for the year ending December 31, 2013.
 
 
3

 

ORANCO, INC.
 
(A Development Stage Company)
 
   
BALANCE SHEETS
 
   
SEPTEMBER 30, 2013 AND DECEMBER 31, 2012
 
             
   
September 30,
   
December 31,
 
   
2013
   
2012
 
Assets
           
             
Current Assets:
           
Cash
  $ 89,093     $ 39,881  
Note receivable, net of allowance of $-0-
    --       90,000  
Interest receivable
    --       1,124  
Prepaid expenses
    4,880       --  
                 
Total current assets
    93,973       131,005  
                 
Total Assets
  $ 93,973     $ 131,005  
                 
Liabilities and Stockholders' Equity
               
                 
Current Liabilities:
               
Accounts payable, related party
  $ 1,235     $ 10,450  
                 
Total current liabilities
    1,235       10,450  
                 
Stockholders' Equity:
               
Common stock, $.001 par value 100,000,000 shares authorized, 4,269,950 issued and outstanding
    4,270       4,270  
Additional paid-in capital
    349,898       349,898  
Deficit accumulated during thedevelopment stage
    (261,430 )     (233,613 )
                 
Total Stockholders' Equity
    92,738       120,555  
                 
Total Liabilities and Stockholders'  Equity
  $ 93,973     $ 131,005  
 
The accompanying notes are an integral part of the financial statements.

 
4

 
 
ORANCO, INC.
 
(A Development Stage Company)
 
   
STATEMENTS OF OPERATIONS
 
                               
                           
For the
 
                           
Period
 
   
For the
   
For the
   
For the
   
For the
   
June 16, 1977
 
   
Three Months
   
Three Months
   
Nine Months
   
Nine Months
   
(Inception)
 
   
Ended
   
Ended
   
Ended
   
Ended
   
Through
 
   
September 30,
   
September 30,
   
September 30,
   
September 30,
   
September 30,
 
   
2013
   
2012
   
2013
   
2012
   
2013
 
                               
Revenues
  $ --     $ --     $ --     $ --     $ --  
                                         
Expenses, general and administrative
    14,724       8,435       30,077       43,456       424,396  
                                         
Valuation adjustment - available for sale securities
    --       --       --       --       30,401  
                                         
Operating loss
    (14,724 )     (8,435 )     (30,077 )     (43,456 )     (454,797 )
                                         
Other income (expense):
                                       
   Litigation settlement
    --       (12,500 )     --       (12,500 )     (12,500 )
   Interest and contract income
    22       1,083       2,260       1,417       205,867  
                                         
Loss before provision for income taxes
    (14,702 )     (19,852 )     (27,817 )     (54,539 )     (261,430 )
                                         
Provision for income taxes
    --       --       --       --       --  
                                         
Net loss
  $ (14,702 )   $ (19,852 )   $ (27,817 )   $ (54,539 )   $ (261,430 )
                                         
Net loss per share
  $ --     $ --     $ (0.01 )   $ (0.01 )        
                                         
Weighted average shares outstanding
    4,269,950       4,269,950       4,269,950       4,269,950          
 
The accompanying notes are an integral part of the financial statements.
 
 
5

 

ORANCO, INC.
 
(A Development Stage Company)
 
   
STATEMENTS OF CASH FLOWS
 
                   
               
For the
 
               
Period
 
   
For the
   
For the
   
June 16, 1977
 
   
Nine Months
   
Nine Months
   
(Inception)
 
   
Ended
   
Ended
   
Through
 
   
September 30,
   
September 30,
   
September 30,
 
   
2013
   
2012
   
2013
 
                   
Cash flows from operating activities:
                 
Net loss
  $ (27,817 )   $ (54,539 )   $ (261,430 )
Adjustments to reconcile net loss to cash provided by operating activities:
                       
(Increase) in prepaid expenses
    (4,880 )     --       (4,880 )
(Increase) decrease in interest receivable
    1,124       (1,073 )     --  
Increase (decrease) in accounts payable
    (9,215 )     1,143       1,235  
                         
Net cash used by operating activities
    (40,788 )     (54,469 )     (265,075 )
Cash flows from investing activities:
                       
Investment (maturity) in note receivable
    90,000       (90,000 )     --  
Cash flows from financing activities:
                       
Issuance of common stock
    --       --       354,168  
Net increase (decrease) in cash
    49,212       (144,469 )     89,093  
                         
Cash, beginning of period
    39,881       190,340       --  
                         
Cash, end of period
  $ 89,093     $ 45,871     $ 89,093  
Interest paid
  $ --     $ --     $ --  
Income taxes paid
  $ --     $ --     $ --  
 
The accompanying notes are an integral part of the financial statements.
 
 
6

 
 
ORANCO, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS


1.           Summary of Business and Significant Accounting Policies

a.           Summary of Business

 
The Company was incorporated under the laws of the State of Nevada on June 16, 1977.  The Company has been in the business of the development of mineral deposits. During 1983 all activities were abandoned and the Company has remained inactive since that time. The Company has not commenced principal operations and is considered a "Development Stage Company" as defined by FASB ASC 915 (formerly Statement of Financial Accounting Standards (SFAS) No. 7).

 
b.
Basis of Presentation

 
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.

 
In July 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 105-10, formerly Statement of Financial Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles, which became the single source of authoritative GAAP recognized by the FASB. ASC 105-10 does not change current U.S. GAAP, but on the effective date, the FASB ASC superseded all then existing non-SEC accounting and reporting standards.

c.           Cash Flows

 
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.
 
7

 

Notes to Financial Statements – Continued


d.           Net Loss Per Share

 
The net loss per share calculation is based on the weighted average number of shares outstanding during the period.

e.           Use of Estimates

 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.

f.           Fair Value of Financial Instruments

 
ASC 820-10 (formerly SFAS No. 157, Fair Value Measurements) requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2013 and December 31, 2012, the carrying value of certain financial instruments approximates fair value due to the short-term nature of such instruments.

2.   Note Receivable

 
On July 5, 2012, the Company advanced $90,000 for an unsecured note receivable due from a non-related party. The note bears interest at 5% and is due June 30, 2013. The note and accrued interest totaling $91,122 was paid on July 2, 2013.
 
 
8

 

Notes to Financial Statements - Continued

 
3.           Warrants and Stock Options
 
No options or warrants are outstanding to acquire the Company's common stock.

4.           Income Taxes

The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $233,613 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they are incurred. Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero. Therefore, there are no tax benefits recognized in the accompanying statement of operations.

5.           Office Rent

The Company’s board of directors approved an office lease at $475 per month to a current director of the Company through September 30, 2013. The amount owed and expensed at December 31, 2012 is $10,450. The amount expensed through September 30, 2013 is $4,275.

 
9

 

 

 
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 

 
Plan of Operations.
 
The Company has not engaged in any material operations or had any revenues from operations  since inception.  The  Company's  plan of operation  for the next 12  months is to  continue  to seek the  acquisition  of assets,  properties  or  businesses  that  may  benefit  the  Company  and  its stockholders. Management has recently focused is efforts in Europe, Africa, and South America both because management is located Europe and because management believes that the Company can locate superior acquisition opportunities in these geographical areas. Management has held talk with various parties regarding a merger or acquisition. However, no definitive agreement as to any such has been reached, at this time. Management anticipates that to achieve any such acquisition, the Company will issue shares of its common stock as the sole consideration for such acquisition.

During the next 12 months, the Company's only foreseeable cash requirements will relate to maintaining  the  Company in good  standing  or the  payment of expenses  associated  with  reviewing or  investigating  any potential  business venture,  which  the  Company  expects  to pay from its  cash  resources Management believes that these funds are sufficient to cover its cash needs for the next 12 months. If additional funds are required during this period, such funds may be  advanced  by  management  or stockholders as loans to the Company. Because the Company has not identified any such venture as of the date of this Report, it is impossible to predict the amount of any such loan.  However, any such loan will be on terms no less favorable to the Company than would be available from a commercial lender in an arm's length transaction. As of the date of this Report, the Company is not engaged in any negotiations  with any person  regarding  any venture.

Results of Operations.

Other than restoring and maintaining its good  corporate  standing in the State  of  Nevada,  obtaining an audit of the Company’s financial statements, submitting the Company’s common stock for quotation on the NASD OTC Bulleting Board, the filing of  a Form 10 Registration, and the completion of a private placement, the Company has had no material business operations and in the two most recent calendar years, it activities have been limited to evaluating possible merger or acquisition candidates..

Three and nine Month Period Ended September 30, 2013 and 2012

The Company did not generate any revenue during the three and nine months ended September 30, 2013 and 2012, respectively. It had interest income of $22 and $1,083 for the three months  and $2,260 and $1,417 for the  nine months ended September 30, 2013 and 2012, respectively, the decrease of which for the three months is attributable to decreased interest income.

General and administrative expenses were $14,724 and $8,435 for the three months and $30,077 and $43,456 for the nine months ended September 30, 2013 and 2012, respectively . The increase in expenses for the three and decrease for the nine months ended September 30, 2013 were largely due to increase in  travel expenses and office expenses somewhat offset by some increases or decreases, as the case may be, in accounting, legal, other professional costs As a result of the foregoing, the Company realized net losses of $14,702 and $19,852 for the three months and $27,817 and $54,539 for the nine months ended September 30, 2013 and 2012, respectively.  The Company’s decreased net loss is attributable to decreased travel and office expenses somewhat offset by an increase in ongoing professional costs associated with preparing the Company’s public reports.

 
10

 
 
Liquidity and Capital Resources

At September 30, 2013, assets consisted of $89,093 in cash and $4,880 in prepaid expenses compared to $39,881 in cash and $91,124 in notes and interest  receivables on December 31, 2012. As of September 30, 2013, the Company had $1,235 in accounts payable. On July 2, 2013 the outstanding note receivable was paid in full, with accrued interest.

Currently, the Company has no material commitments for capital expenditures.  Management anticipates that operating expenses for the next twelve months will be approximately $30,000 to $40,000, which it will fund from its cash assets.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 


Not Required by smaller reporting companies.



ITEM 4T. CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president/chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of our last fiscal quarter, September 30, 2013, (the "Evaluation Date"). Based upon that evaluation, our president/chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter (ended September 30, 2013) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
11

 


PART 2 - OTHER  INFORMATION
 


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 


(a) Exhibits

Exhibit 31.1
Rule 13a-14(a)/15d-14(a) Certification.
   
Exhibit 32.1
Certification by the Chief Executive Officer/Acting Chief Financial Officer Relating to a Periodic Report Containing Financial Statements.*
   
101.INS
XBRL Instance*
   
101.SCH
XBRL Schema*
   
101.CAL
XBRL Calculation*
   
101.DEF
XBRL Definition*
   
101.LAB
XBRL Label*
   
101.PRE
XBRL Presentation*
 
* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
 
 
12

 
 

 
SIGNATURES
 



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized.
 
 
ORANCO, Inc.
 
[Registrant]
   
   
 
/s/ Juan S. Zabala
 
Juan S. Zabala
 
President & Treasurer
 
 
November 11, 2013
 
 
 
 
13